Litigation, Enforcement

Third party notice proceedings before a German Court – follow-up proceedings in England

In the case of related claims, the question may arise as to whether a party may summon a third party to appear in court. In Germany, the third party would simply be given notice of the dispute at
this point, which would allow him to take legal action in the course of the proceedings without actually having to become a party. In the following post-trial proceedings against the third party,
the party who called for a third party can then assert his claims against them. In doing so, the outcomes of the proceedings for taking evidence resulting from pre-trial proceedings become
binding under the so called ‘effect of the third-party intervention’. The remedy is to be found in applicable EU law. Article 8 of the EU Regulation 1215/2012 (Brussels I a) provides that a third
party may be involved in an existing legal proceeding if the defendant in these process believes to have a right of recourse against the third party in the event of failure and if a material link
exists between the claims. In the case of such an ‘intervention action’, a single judgement is then issued for or against all participants – including the third party. After this a follow-up
process becomes obsolete. The purpose of this provision is clearly to avoid diverging decisions regarding the same facts.

However, especially in connection with Germany, Article 8 of the EU Regulation only applies to a limited extent. No. 2 of the article is not applicable in Germany according to Article 65 of the
EU Regulation 1215/2012. So if a third party against whom a defendant believes to have a right of recourse in an ongoing lawsuit in Germany is domiciled in England, this third party cannot be
included in the lawsuit in Germany, but must be a subject of a subsequent lawsuit in England. The dispute should therefore always be announced. Whether and how a third party notice is recognised
in the English follow-up process depends on the individual case and ZIMMERs will be happy to advise you on this question.

Litigating in person will not usually justify applying a lower standard of compliance with rules or orders of the court

In a recent appeal, the Supreme Court had to decide whether the Court should retrospectively validate an invalid service of claim form by a litigant in person. In doing so it also discussed the
question: What can be expected from a litigant in person in terms of compliance with rules or orders and in how far does a court need to take this status into account?

The Court acknowledged that being a litigant in person is not always a matter of choice - representing himself is not easy. Thus the Court needs to make allowances in making case management
decisions and in conducting hearings. But it has been emphasised: The standard of compliance with rules or orders is the same for all litigants. An exception can only be made where rules and
practice directions are particularly inaccessible or obscure.

In conclusion, the Supreme Court held that litigants in person are expected to familiarise themselves with the rules which apply to any step they are about to take.

Enforcement Post Brexit

In the UK it is suggested that EU Regulations can be transposed into domestic law via the so-called “Great Repeal Bill” or The European Union (withdrawal) Bill. English courts will continue to
apply an essentially similar regime post-Brexit. This would be applicable for the Rome I and II Regulations. In contrast, the Brussels I Recast Regulation depends upon reciprocity and sincere
cooperation between member states. If the UK is not a member of the agreed scheme then transposing the Brussels I rules into UK domestic law is of no assistance. The ease of recognition and
enforcement of judgments under the Brussels I (Recast) would be lost. It is possible that superseded international conventions, such as the Brussels Convention 1968 and the Lugano Convention
1988, might spring back to life and that also old judgment recognition conventions may revive in significance after Brexit. However, we encourage our clients to commence cross-border enforcement
proceedings between the UK and Germany, as soon as possible, in order to benefit from the great degree of certainty that the Brussels I (Recast) Regulation provides.

The European order for payment

Since 12 December 2008 a European order for payment procedure ((EG) No. 1896/2006) is placed at disposal in the member states of the European Union – with exception of Denmark. This procedure
leads in cross-border cases in civil and commercial matters to a cost-efficient and fast enforceable title, and applies only to the collection of pecuniary claims for a specific amount that have
fallen due at the time when the application for a European order for payment is submitted.

The enforcement is possible in the origin member state that means in the state in which the payment order was obtained, as well as in every other member state of the European Union – with the
exception of Denmark. It might only be that it has to be translated in the appropriate language.

Enforcement of arbitration awards in England

Arbitration and the enforcement of arbitration awards are regulated by the Arbitration Act 1996 in England.

An arbitration award given in England will be declared enforceable after the appropriate application is made to the Court according to Art. 66 Arbitration Act 1996.

Foreign arbitration awards made in a country that, like England, is a contracted member state of the New York Convention 1958 on the Recognition and Enforcement of foreign arbitration awards are
always declared enforceable in England. The precise procedure for declaring enforceability by English courts (County Court or High Court) is laid out in Art. 100 of the Arbitration Act 1996. It
is a relatively short, uncomplicated process. Recognising a foreign arbitration award for enforcement can only be refused in special cases (see Art. 103 Arbitration Act). If the English court
recognises the enforcement of the arbitration award, enforcement will proceed exactly as with a judgment pronounced and enforceable in England.

Germany, Austria and Switzerland are among the member states of the New York Convention. Arbitration awards made in these countries, as well as arbitration awards from the Court of Arbitration
for Sport (CAS) based in Switzerland, are therefore always recognised as enforceable if the formal process is adhered to.

Enforcement of German judgments in England

German judgments against defendants resident in England can be enforced. Enforcement is carried out with a German judgment registered with the High Court of Justice or a so-called European
Enforcement Order (confirmation of a European enforcement order) that is issued at the request of German courts.

While on the European mainland the principle governing costs states that the losing party at least receives reimbursement of the court and lawyer’s costs calculated by means of a table of costs,
the amount of reimbursement of costs in England and Wales depends principally on the value of the claim. In “small claims track” proceedings with a value of up to £10,000, involving the
enforcement of payments, there is hardly any reimbursement of the solicitor’s costs. In claims for personal injury, this limit is just £1,000. In such abbreviated proceedings English civil
procedure is designed to keep the costs as low as possible. For claims valued at more than this, up to £25,000, there is the “fast-track” process. Reimbursement of costs is a mixture of set costs
for certain parts of the proceedings and costs set according to expenses, similar to the “multi-track” proceedings (see below).

In cases for claims valued at more than £25,000 the “multi-track” method is applied. Reimbursement of costs is most complicated in this process. A bill of costs is issued for the
reimbursement of costs. This is done by professionals called costs draftsmen. Their work can cost from a few hundred to a few thousand pounds, which in theory are to be paid in full, but in
practice only partially, by the losing party.

The amount of costs to be reimbursed is at the Court’s discretion, based on what is considered fair and reasonable. In general it can be said that even if a claim is granted in full, one will
only receive reimbursement of 70% of one’s own solicitor’s costs from the other side, and usually with a delay of 1 to 1½ years.

This is only a summary. The details are contained in a comprehensive code of practice that even sets out details on each section of an invoice.